Annual Report 2011 Annual Beiersdorf Aktiengesellschaft, Unnastrasse 48, 20245 Hamburg, Germany Annual Report 2011 Telephone: +49 40 4909-0, Fax: +49 40 4909-3434 Internet: www.Beiersdorf.com Skin Care for You Beiersdorf 2011 Key Figures – Overview 2010 2011 Group sales* (in € million) 5,571 5,633 Change (organic) (in %) 3.1 2.1 Consumer sales* (in € million) 4,698 4,696 Change (organic) (in %) 1.6 1.1 tesa sales (in € million) 873 937 Change (organic) (in %) 13.3 7.9 Operating result (EBIT, excluding special factors) (in € million) 699 646 Operating result (EBIT) (in € million) 583 431 Profit after tax (in € million) 326 259 Return on sales after tax* (in %) 5.9 4.6 Earnings per share (in €) 1.40 1.10 Total dividend (in € million) 159 159 Dividend per share (in €) 0.70 0.70 Gross cash flow (in € million) 518 428 Capital expenditure (in € million) 96 86 Research and development expenses (in € million) 152 163 Employees (as of Dec. 31) 19,128 17,666 * The prior-year figures have been adjusted due to the amendment of the sales presentation format. See the disclosures in the section of the notes to the consolidated financial statements entitled “Changes in Accounting Policies.” 1 – To Our1 – To Shareholders Skin Care for You 2 – Corporate Governance 3 – Corporate Sustainability Differences make us special Beiersdorf knows the individual skin and body care wishes and needs that make up each person, and has them firmly in sight. We are interested in our consumers as individuals. We want to understand what is important to them and how they live. We listen to them, observe them 4 – Group Management Report closely, and develop skin care products that meet their needs and satisfy them at all levels. These needs differ not only from person to person but also from region to region. This closeness to our consum- ers around the world is the basis for NIVEA, Eucerin, and La Prairie, our successful international brands. With them we have developed an Statements unique product portfolio that is individually tailored to the wide range 5 – Consolidated Financial of consumer wishes. In this Annual Report you will get to know six people from different countries and learn about the wishes and needs that make them so special. 6 – Auditors’ Report and Responsibility Statement 7 – Additional Information p. – – – Contents Skin Care for You 2 Skin Care for You DIFFERENCES MAKE US SPECIAL p. 4 Focus on Skin Care. Closer to … p. 6 … Jacques & Julien. Jacques (65) & — Europe Reporting Region – Julien Dupont (5) — Marseille, Consumer Business Segment France p. 12 … Joanna & Paolo. Joanna Dos Santos (31) & — Americas Reporting Region – Paolo Rodriguez (34) — Rio de Janeiro, Consumer Business Segment Brazil p. 18 … May-Lin & Lena. May-Lin Han (21) & — Africa/Asia/Australia Reporting Region – Lena Riedel (23) — Hamburg, Consumer Business Segment Germany ABOUT US p. 24 Research & Development at Beiersdorf p. 25 Most Important Innovations in 2011 p. 26 Highlights in 2011 – Beiersdorf Annual Report 2011 – – p. – Contents Financial Report 3 ( p. 27 – 40 ) To Our Shareholders Our1 – To Shareholders 1 p. 28 Letter from the Chairman p. 32 The Executive Board of Beiersdorf AG p. 34 Generation Change at the Top p. 36 Beiersdorf’s Shares and Investor Relations p. 38 Report by the Supervisory Board ( p. 41 – 60 ) Corporate Governance 2 p. 42 Declaration of Compliance p. 44 General Information on Beiersdorf’s Management Structure p. 49 Remuneration Report p. 58 Director’s Dealings and Shareholdings p. 59 Corporate Governance Practices 2 – Corporate Governance p. 60 Further Information ( p. 61 – 70 ) Corporate Sustainability 3 p. 62 Sustainability Strategy “We care.” p. 64 Commitment – Products p. 65 Commitment – Planet p. 68 Commitment – People ( p. 71 – 110 ) Group Management Report 4 p. 72 Beiersdorf’s Brands 3 – Corporate Sustainability p. 73 Business and Strategy p. 77 Economic Environment p. 79 Results of Operations, Balance Sheet Structure, and Financial Position p. 92 Research and Development p. 96 Sustainability p. 99 Employees p. 103 Risk Report p. 106 Report by the Executive Board on Dealings among Group Companies p. 106 Report on Post-Balance Sheet Date Events p. 106 Disclosures Required by Takeover Law p. 109 Report on Expected Developments ( p. 111 – 158 ) Consolidated Financial 4 – Group Management Report 5 Statements p. 112 Consolidated Income Statement p. 113 Statement of Comprehensive Income p. 114 Consolidated Balance Sheet p. 115 Consolidated Cash Flow Statement p. 116 Statement of Changes in Equity Notes to the Consolidated Financial Statements Statements p. 117 Consolidated Segment Reporting p. 119 Significant Accounting Policies p. 128 Consolidated Group, Acquisitions, and Divestments 5 – Consolidated Financial p. 133 Notes to the Income Statement p. 137 Notes to the Balance Sheet p. 153 Other Disclosures p. 157 Beiersdorf AG Boards ( p. 159 – 162 ) Auditors’ Report and 6 Responsibility Statement p. 160 Auditors’ Report p. 162 Responsibility Statement by the Executive Board 6 – Auditors’ Report and Responsibility Statement ( p. 163 – 172 ) Additional Information 7 p. 164 Annual Financial Statements of Beiersdorf AG in Accordance with the HGB (Condensed) p. 165 Glossary p. 166 Index p. 170 Ten-year Overview p. 171 Financial Calendar p. 172 Contact Information – Beiersdorf Annual Report 2011 7 – Additional Information p. – – – Differences Focus on Skin Care. 4 make us special Closer to … DIFFERENCES MAKE US SPECIAL – Beiersdorf Annual Report 2011 – – p. – Differences Focus on Skin Care. make us special Closer to … 5 1 – To Our1 – To Shareholders closer to may-lin & Lena p. – 18 2 – Corporate Governance Hamburg Marseille closer to jacQUes & JUlien p. – 6 3 – Corporate Sustainability 4 – Group Management Report Rio de Janeiro closer to joanna & paolo Statements p. – 12 5 – Consolidated Financial Looking for differences small and large. 6 – Auditors’ Report and Responsibility Statement “Focus on Skin Care. Closer to Markets.” is our strat- An important prerequisite for this is closeness to egy. We know that to be closer to the market you the regional markets. Only this allows us to meet have to be closer to consumers. This is why we ob- our goal of developing high-quality, effective skin serve our consumers closely to understand what care products for our consumers around the world: moves them and what their individual needs are. Skin Care for You. – Beiersdorf Annual Report 2011 7 – Additional Information “Happiness is the small moments.” Jacques (65) & Julien Dupont (5) – Marseille, France – – p. – Differences Focus on Skin Care. make us special Closer to Jacques & Julien. 7 1 – To Our1 – To Shareholders DIFFERENCES MAKE US SPECIAL 2 – Corporate Governance closer to jacQUES 3 – Corporate Sustainability & JULien Closer to Jacques & Julien: on a voyage of discovery in Marseille. — Marseille, France — 4 – Group Management Report Julien and his granddad have a fun- ing to these needs and is developing and activity-filled program ahead EUROPE innovative skin care products. This is of them. Typical for Julien – and for REPORTING REGION where we benefit from our extreme Jacques, who is still living life to the closeness to consumers. Europe is CONSUMER full at the age of 65. Although people the market in which our success be- BUSINESS SEGMENT Statements in Europe are getting older, they are gan, and it is our strongest-selling and staying younger in the process. They most profitable region. Eastern Europe 5 – Consolidated Financial are actively shaping their lives and is a future growth market. NIVEA, the want to experience things. At the top 71 world’s number 1 for skin care*, has of the list is often spending free time — Affiliates — been a global success for more than with family. People are more conscious 100 years. We aim to extend this posi- about taking care of themselves and a tion – not only in Europe, but in the en- well-groomed appearance also plays €2,792 million tire world. Eucerin, a leading medical — Sales — an important role. Awareness of the skin care brand, offers great growth need for skin care has increased in potential, while our Hansaplast plaster Europe in recent years. Many people brand is also leading in its segment in 6 – Auditors’ Report 59.5% and Responsibility Statement specifically want to protect their skin Europe. We are doing everything to — Share of sales — against environmental impacts such consolidate and expand this excellent as from the sun. Beiersdorf is respond- market position. * Source: Euromonitor International Limited; per umbrella brand name classification; in retail value terms 2010. – Beiersdorf Annual Report 2011 7 – Additional Information p. – – – Differences Focus on Skin Care. 8 make us special Closer to Jacques & Julien. Discovery tour in the harbor: colorful boats and fresh fish. — – Beiersdorf Annual Report 2011 – – p. – Differences Focus on Skin Care. make us special Closer to Jacques & Julien. 9 1 – To Our1 – To Shareholders A sunny break. Jacques & Julien have an incredible view of the city from their picnic spot. And when the sun shines as brightly as today, they cannot forget their sunscreen. 2 – Corporate Governance 3 – Corporate Sustainability 4 – Group Management Report Statements 5 – Consolidated Financial 6 – Auditors’ Report and Responsibility Statement – Beiersdorf Annual Report 2011 7 – Additional Information p. – – – Differences Focus on Skin Care. 10 make us special Closer to Jacques & Julien. The city is an adventure: Julien chases pigeons. — – Beiersdorf Annual Report 2011 – – p. – Differences Focus on Skin Care. make us special Closer to Jacques & Julien. 11 1 – To Our1 – To Shareholders JEAN-FRANCOIS PASCAL (44) Born in Sète (France) 2 – Corporate Governance Corporate Marketing Director NIVEA Marketing As International Brand Manager, I am responsi- ble for global brand management in the NIVEA Body Care and NIVEA Creme categories. I have already worked for Beiersdorf in a number of places around the world, such as São Paulo and Paris. My international experience has given me a good understanding of regional market differ- 3 – Corporate Sustainability ences, and allows me to gain important insights about our consumers’ needs together with my lo- cal colleagues.